High street turmoil as thousands of shops close in first half of year
Figures show 2,692 stores closed in the first six month of the year – roughly 14 a day.
High street shops closed at a rate of around 14 a day in the first half of the year, while openings were down a third, a report suggests.
Retailers are battling the worst trading conditions for five years, with the growth of internet shopping and business rates blamed for the challenging climate.
The rise of “in-home leisure” – people preferring to spend free time and entertain at home rather than go out and about – is also suspected of taking a bite out of earnings.
Italian restaurants including Jamie Oliver’s chain are said to have been particularly badly hit by the change, while retailers such as Toys R Us and Maplin have gone to the wall as more people shop online.
Ministers have been urged to take concerted action to help Britain’s beleaguered town centres, with experts warning the turmoil is “unlikely to abate”.
The Government said the recent Budget has “high streets at its heart”.
A study of 500 high streets by accountants PricewaterhouseCoopers and the Local Data Company found 2,692 stores had vanished in the first six month of the year – roughly 14 a day.
The rate is similar to the same period in 2017, although there has been a dramatic fall in the number of openings year-on-year.
Compared with 2,342 shops opening their doors in the first six months of last year, there were 1,569 openings between January 1 and June 30.
Greater London and the South East were the regions worst hit by closures of chains, followed by the Midlands, the North East and East of England.
Wales was the best-performing region, although it still saw a net loss of 22.
Openings simply aren’t replacing the closures at a fast enough rate Lisa Hooker, consumer markets leader at PwC
Lisa Hooker, consumer markets leader at PwC, said the continued rate of store closures “reflects the new reality that many of us prefer to shop online and increasingly eat, drink and entertain at home”.
“The high street is adapting to an overcapacity in retail and leisure space resulting from these channel shifts,” she said.
“Openings simply aren’t replacing the closures at a fast enough rate. Specifically, the openings across ‘experiential’ chains, such as ice cream parlours, beauty salons and vape shops, haven’t been enough to offset closures in the more traditional categories.
“Looking ahead, the turmoil facing the sector is unlikely to abate. Store closures already announced in the second half of the year due to administrations and CVAs already will further intensify the situation.”
Tom Ironside, director of business and regulation at the British Retail Consortium, told The Guardian: “The pressure on retailers, which is contributing to store closures, will continue unless the government takes decisive action.”
He also called for the Government to address “spiralling business rates for the larger businesses that employ the majority of the UK’s 3.1 million retail workers”.
High streets minister Jake Berry said: “The Government recognises the challenges facing high streets driven by changing consumer behaviour.
“That is why the Budget has high streets at its heart. We have created a £675 million fund to help high streets adapt, slashed business rates by a third for the majority of smaller businesses, and are creating a task force guided by Sir John Timpson, one of the UK’s most experienced retailers, to ensure that high streets are adapting for rapid change and are fit for the future.
“These measures totalling over £1.5 billion show the Government’s determination to make thriving high streets a permanent part of every community in England.”
Toys R Us, Maplin, Poundworld and Coast have been among the major fatalities on the high street so far in 2018, while House of Fraser was rescued from administration by Sports Direct founder Mike Ashley.
Debenhams, Marks & Spencer, Mothercare, Homebase and Carpetright have undertaken closure programmes with varying scales.
Company Voluntary Arrangements (CVAs) have been used with increased frequency as large and established chains struggle to adapt to the changing consumer landscape while being buffeted by headwinds including the increased costs from wages and rates.
Jamie’s Italian and Prezzo have announced CVAs, while Gourmet Burger Kitchen and Byron are also utilising the arrangements.
Shadow business secretary Rebecca Long Bailey said: “We need to stop the onslaught of store closures and job losses on the high street, but the Tories’ plan will merely tinker at the edges.
“Without long-term structural support, the future looks very bleak for our high streets and town centres. Labour’s five-point plan, from our reform of businesses rates to our empty shops register, will rejuvenate the high street.”